Home / Quotes / Quote by Alan Greenspan

Quote by Alan Greenspan

“I believe that the general growth in large [financial] institutions have occurred in the context of an underlying structure of markets in which many of the larger risks are dramatically -- I should say, fully -- hedged.”

Quote by Alan Greenspan

Author

Alan Greenspan, born on March 6, 1926, is an accomplished economist from the United States. He has made significant contributions to the field of economics and has had a profound impact on the global financial system as the Chairman of the Federal Reserve System. more

You May Also Like

“The use of a growing array of derivatives and the related application of more-sophisticated approaches to measuring and managing risk are key factors underpinning the greater resilience of our largest financial institutions... Derivatives have permitted the unbundling of financial risks.”

Use Greater Growing Risk Keys Approach Institutions Financial Resilience Factors Related Application Sophisticated Measuring Derivatives Financial Institutions Financial Risk

Author:Alan Greenspan

“I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.”

Made Self Interest Mistake Capable Firm Equity Self Interest Made A Mistake Organisation Shareholders I Made A Mistake Presuming

Author:Alan Greenspan

“But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?”

Knows Past Values Subjects Decades Unexpected Japan Assets Irrational Over The Past Exuberance Contractions

Book:The Age of Turbulence: Adventures in a New World

Source: The Age of Turbulence: Adventures in a New World

“We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs and price stability.”

Ifs Needs Doe Real Jobs Economy Concerned Financial Productions Assets Stability Bubbles Bankers Price Stability

Book:The Age of Turbulence: Adventures in a New World

Source: The Age of Turbulence: Adventures in a New World

“We ought to be opening up our borders to skilled labour from all parts of the world because [the state of the world is as follows: ] if we were to do that we would increase the supply of skilled workers that our schools have been unable to create and as a consequence of that we would lower the average wage of skills and reduce the degree of income inequality in this country.”

Ifs World Has Beens Country States School Ought Skills Degrees Consequence Increase Workers Average Income Opening Inequality Borders Labour Opening Up Income Inequality Skilled Workers

Author:Alan Greenspan

“By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.”

Has Beens Past Events Development Extraordinary Financial Decades Significant Finance Expansion Derivatives Significant Events

Author:Alan Greenspan

“Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?”

Knows Past Values Risk Subjects Higher Lows Rate Decades Uncertainty Unexpected Japan Assets Irrational Earning Inflation Over The Past Ratios Exuberance Contractions Inverse

Author:Alan Greenspan

“Developing protectionism regarding trade and our reluctance to place fiscal policy on a more sustainable path are threatening what may well be our most valued policy asset: the increased flexibility of our economy, which has fostered our extraordinary resilience to shocks.”

Wells May Economy Path Policy Trade Extraordinary Resilience Developing Shock Assets Threatening Flexibility Reluctance Protectionism Fiscal Policy

Author:Alan Greenspan

“Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices, ... This is the reason that history has not dealt kindly with the aftermath of protracted periods of low risk premiums.”

Reason Values Risk Higher Periods Lows Consequence Debt Assets Investors Caution Aftermath

Author:Alan Greenspan

“Credit-default swaps, I think, have serious problems associated with them.”

Thinking Problem Serious Credit Default Credit Default Swap

Author:Alan Greenspan